[Federal Register Volume 75, Number 191 (Monday, October 4, 2010)]
[Notices]
[Pages 61165-61166]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-24829]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-5411-N-04]
Credit Watch Termination Initiative Termination of Direct
Endorsement (DE) Approval
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner, HUD.
ACTION: Notice.
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SUMMARY: This notice advises of the cause and effect of termination of
Direct Endorsement (DE) Approval taken by HUD's Federal Housing
Administration (FHA) against HUD-approved mortgagees through the FHA
Credit Watch Termination Initiative. This notice includes a list of
mortgagees which have had their DE Approval terminated.
FOR FURTHER INFORMATION CONTACT: The Quality Assurance Division, Office
of Housing, Department of Housing and Urban Development, 451 Seventh
Street, SW., Room B133-P3214, Washington, DC 20410-8000; telephone
(202) 708-2830 (this is not a toll-free number). Persons with hearing
or speech impairments may access that number through TTY by calling the
Federal Information Relay Service at (800) 877-8339.
SUPPLEMENTARY INFORMATION: HUD has the authority to address
deficiencies in the performance of lenders' loans as provided in HUD's
mortgagee approval regulations at 24 CFR 202.3. On May 17, 1999 HUD
published a notice (64 FR 26769), on its procedures for terminating
Origination Approval Agreements with FHA lenders and placement of FHA
lenders on Credit Watch status (an evaluation period). In the May 17,
1999 notice, HUD advised that it would publish in the Federal Register
a list of mortgagees, which have had their Approval Agreements
terminated. On January 21, 2010 HUD issued Mortgagee Letter 2010-03
which advised the extended procedures for
[[Page 61166]]
terminating Underwriting Authority of Direct Endorsement mortgagees.
Termination of Direct Endorsement Approval: Approval of a DE
mortgagee by HUD/FHA authorizes the mortgagee to underwrite single
family mortgage loans and submit them to FHA for insurance endorsement.
The Approval may be terminated on the basis of poor performance of FHA-
insured mortgage loans underwritten by the mortgagee. The termination
of a mortgagee's DE Approval is separate and apart from any action
taken by HUD's Mortgagee Review Board under HUD's regulations at 24 CFR
part 25.
Cause: HUD's regulations permit HUD to terminate the DE Approval
with any mortgagee having a default and claim rate for loans endorsed
within the preceding 24 months that exceeds 300 percent of the default
and claim rate within the geographic area served by a HUD field office,
and also exceeds the national default and claim rate. For quarterly
review period ending December 31, 2009, HUD is terminating the DE
Approval of mortgagees whose default and claim rate exceeds both the
national rate and 300 percent of the field office rate.
Effect: Termination of the DE Approval precludes the mortgagee from
underwriting FHA-insured single-family mortgages within the area of the
HUD field office(s) listed in this notice. Mortgagees authorized to
purchase, hold, or service FHA insured mortgages may continue to do so.
Loans that closed or were approved before the Termination became
effective may be submitted for insurance endorsement. Approved loans
are those already underwritten and approved by a DE underwriter, and
cases covered by a firm commitment issued by HUD. Cases at earlier
stages of processing cannot be submitted for insurance by the
terminated mortgagee; however, the cases may be transferred for
completion of processing and underwriting to another mortgagee with DE
Approval in that area. Mortgagees are obligated to continue to pay
existing insurance premiums and meet all other obligations associated
with insured mortgages.
A terminated mortgagee may apply for reinstatement of the DE
Approval if the DE Approval for the affected area or areas has been
terminated for at least six months and the mortgagee continues to be an
approved mortgagee meeting the requirements of 24 CFR 202.5, 202.6,
202.7, 202.10 and 202.12. The mortgagee's application for reinstatement
must be in a format prescribed by the Secretary and signed by the
mortgagee. In addition, the application must be accompanied by an
independent analysis of the terminated office's operations as well as
its mortgage production, specifically including the FHA-insured
mortgages cited in its termination notice. This independent analysis
shall identify the underlying cause for the mortgagee's high default
and claim rate. The analysis must be prepared by an independent
Certified Public Accountant (CPA) qualified to perform audits under
Government Auditing Standards as provided by the Government
Accountability Office. The mortgagee must also submit a written
corrective action plan to address each of the issues identified in the
CPA's report, along with evidence that the plan has been implemented.
The application for a new Agreement should be in the form of a letter,
accompanied by the CPA's report and corrective action plan. The request
should be sent to the Director, Office of Lender Activities and Program
Compliance, 451 Seventh Street, SW., Room B133-P3214, Washington, DC
20410-8000 or by courier to 490 L'Enfant Plaza, East, SW., Suite 3214,
Washington, DC 20024-8000.
Action: The following mortgagees have had their DE Approvals
terminated by HUD:
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HUD office Termination Homeownership
Mortgagee name Mortgagee branch address jurisdictions effective date centers
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Alacrity Lending Co........... 2535 E Southlake Blvd., Fort Worth...... 7/9/2010 Denver.
Suite 100, Southlake, TX
76092.
Cambridge Home Capital LLC.... 80 Cuttermill Road, Suite New York........ 6/24/2010 Philadelphia.
408, Great Neck, NY 11021.
Freedom Mortgage Corp......... 907 Pleasant Valley Avenue, San Antonio..... 7/1/2010 Denver.
Mount Laurel, NJ 08054.
Pierce Commercial Bankk....... 1722 S Union Avenue, Seattle......... 7/1/2010 Santa Ana.
Tacoma, WA 98405.
Universal Lending Corp........ 6775 E Evans Avenue, Houston......... 7/9/2010 Denver.
Denver, CO 80224.
Universal Lending Corp........ 6775 E Evans Avenue, Kansas City..... 7/9/2010 Denver.
Denver, CO 80224.
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Dated: September 23, 2010.
David H. Stevens,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 2010-24829 Filed 10-1-10; 8:45 am]
BILLING CODE 4210-67-P